Hedge fund director now adviser

Obama adviser Summers made millions through that and speaking fees.

Obama adviser Summers made millions through that and speaking fees.

April 05, 2009

WASHINGTON (AP) -- Lawrence Summers, President Barack Obama's top economic adviser, earned millions over the past year as managing director of the hedge fund D.E. Shaw Group and through speaking fees, some from financial institutions now at the center of the government's rescue program. Financial disclosure reports released by the White House show that Summers received $5.2 million from D.E. Shaw. He also reported payments for appearances before institutions such as J.P. Morgan, Citigroup, Goldman Sachs and Lehman Brothers. Overall, Summers was paid $2.7 million for more than 40 appearances before different organizations and companies, including financial institutions. "Given that Dr. Summers is widely recognized as one of the country's most distinguished economists and formerly served as treasury Secretary, there was considerable interest in hearing his economic insights from companies across various industries," White House spokesman Ben LaBolt said. Obama has enacted strict rules against hiring lobbyists for administration positions that would have influence over their former clients. A White House official said Summers will not work on issues specifically related to D.E. Shaw for two years. The official noted that Summers was not an adviser or an employee of the firms that paid him to give speeches. Another top White House aide, senior adviser David Axelrod, disclosed that he sold his share of two campaign and media strategy businesses last year for $3 million. The money will be paid to him in annual installments over the next five years, beginning Dec. 31. Axelrod also reported income of more than $1 million last year from the two companies, David Axelrod & Associates and ASK Public Strategies. Summers began as managing director at D.E. Shaw Group in October 2006. A company press release at the time said Summers would be involved part time to offer advice on strategic initiatives, provide high-level research and advise the executive committee. His income from the firm included deferred compensation from 2007 and 2008 that he was paid this year. D.E. Shaw is a global investment and technology development firm with about $36 billion in investment capital. LaBolt said the administration has worked to tighten accountability over banks and altered conditions for the receipt of government financial bailout funds "so that taxpayers can see how their money is being spent, the influence of lobbyists is curbed, executive compensation is reined in, and firms are required to show how they will preserve or expand lending using government funds." He said Summers "has been at the forefront of this administration's work to shore up our nation's financial system and to put in place a regulatory framework that will strengthen the financial system and its oversight -- all in an effort to help the families across America who have paid a very steep price for risky decisions made by Wall Street executives."